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Logistics and Shoe Sales Cost Analysis

ABC Logistics incurred a total cost of P85,000 for shipping activities from January 5 to 8, 201C. The total quintal-km shipped was 625, with a cost per quintal-km of P136. Mendez Shoes had an average price of P1,000 per shoe. Their cost per unit was P500. With a beginning inventory of P1.1 million and additional purchases of P1.9 million, their goods available for sale totaled P3 million. Their product cost percentage was 50% and sales cost was P1.2 million. Their ending inventory cost was P1.8 million.

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471 views3 pages

Logistics and Shoe Sales Cost Analysis

ABC Logistics incurred a total cost of P85,000 for shipping activities from January 5 to 8, 201C. The total quintal-km shipped was 625, with a cost per quintal-km of P136. Mendez Shoes had an average price of P1,000 per shoe. Their cost per unit was P500. With a beginning inventory of P1.1 million and additional purchases of P1.9 million, their goods available for sale totaled P3 million. Their product cost percentage was 50% and sales cost was P1.2 million. Their ending inventory cost was P1.8 million.

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•MUSIC MOOD•
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© © All Rights Reserved
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  • ABC Logistics
  • Mendez Shoes

ABC Logistics

ABC Logistics has incurred a total cost of P85,000 for their shipping activities from January 5 to January
8, 201C. The data relevant to the said shipment are the following:

Date Quantity in quintal Distance in km

January 5, 201C 50 180

January 6, 201C 35 85

January 7, 201C 20 260

January 8, 201C 40 100

Requirements: (2 items x 10 points)

A. Total quintal-km

B. Cost associated per quintal-km

Solution:

A. Total quintal-km
Date Quantity in quintal Distance in km
January 5, 201C 50 180
January 6, 201C 35 85
January 7, 201C 20 260
January 8, 201C 40 100
625 quintal- km
B. Cost associated per quintal-km
total cost
Cost associated per quintal-km=
total quintal−km
85,000
=
625
= 136 per quintal-km
Mendez Shoes

The average cost of Mendez shoes is P1,000. Relevant to this, the company incurs P500 in producing
their shoes on a per unit basis. The total sales of the company in June 201D are P2,400,000 with a
beginning inventory of P1,100,000 and additional purchases amounting to P1,900,000.

Requirements: (4 items x 10 points)

A. Goods available for sale

B. Product cost percentage

C. Sales cost

D. Cost of ending inventory

Solution:

A. Goods available for sale

Goods available for sale= Beginning inventory + Additional purchases

= 1,100,000 + 1,900,000

= 3,000,000

B. Product cost percentage

cost incurred per unit


Product cost percentage= ×100
selling price
500
= ×100
1,000

= 0.5 × 100

= 50%
C. Sales cost
Sales cost = Total amount of sales × product cost percentage
= 2,400,000×50%
= 1,200,000

D. Cost of ending inventory


Cost of ending inventory= Goods available for sale – sales cost
= 3,000,000 – 1,200,000
= 1,800,000

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